Heather Nellis/Recorder staff
Montgomery County Attorney Douglas Landon, left, speaks during the Board of Supervisors meeting in Fonda Tuesday. At right is board Chairman John Thayer.

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IDA wants new attorney for loan closings

Wednesday, October 23, 2013 - Updated: 10:25 AM

By HEATHER NELLIS

heather.nellis@recordernews.com

FONDA -- A letter from the Mont-gomery County Industrial Development Agency to the board of supervisors regarding legal representation caused a stir at a full board meeting Tuesday.

It apparently took county attorney Douglas Landon by surprise, as it was directed toward his work.

The letter, dated Friday, was written by IDA Chairman Robert Hoefs to explain a request for outside legal counsel in revolving loan fund closings, which is one of Landon's duties.

Economic Development and Planning Director Kenneth Rose, the IDA's CEO, was told to read the aforementioned letter to the board to get it on the record, and to inform supervisors who said they hadn't received it.

It says the board recently approved a resolution allowing the IDA to seek outside counsel for revolving loan collections and defaults due to "inefficiencies" in that system.

In that review, the IDA determined the loan closing process "was also inadequate."

"Through a documentation review, it was noted mortgages were not completed, UCCs were filed incorrectly, and the county's security positions were invalid," Rose read.

The letter continued in recommending the hiring of counsel specialized in commercial loan closings, and who will ensure all pertinent agreements and documents "are completed accurately, reviewed properly, and filed appropriately."

"It is imperative to the IDA, as well as the county, that this up-front service be performed effectively to make certain the county has the greatest security position possible, specifically in the event of a default," Rose read.

Amsterdam 3rd Ward Supervisor Ronald J. Barone Sr. asked if the situation is tied to the defaulted Crystal Ristorante loan. The former longtime Amsterdam eatery shut its doors in September 2012 in a foreclosure proceeding, and the county was left holding the bag on former restaurant owner Tony Centi's defaulted $111,000 revolving loan.

The county was not able to auction off kitchen equipment Centi listed as collateral, because Centi apparently already listed the equipment as collateral on his more than $1 million defaulted mortgage with BLX Capital LLC.

"[Landon] is taking the blame for it, and this is not the truth," Barone said.

Landon said he didn't receive a copy of Hoefs' letter and therefore wasn't prepared to comment on the issue.

Landon prefaced his response by noting there are several loan closings pending, and an outside attorney was hired to do them without approval from the board.

He also noted the IDA's letter was written after the resolution had already moved through committee. Rose previously noted the letter was written as a result of the IDA's Thursday meeting.

Landon then addressed the questions about Crystal Ristorante.

"I'd be happy to get my file on this and have a conversation about this in the future. To my knowledge, there is absolutely nothing in the file indicates problems that I was involved in, in any way, shape or form," Landon said.

Barone said the situation was one of "meanness going on in these chambers."

Landon said he didn't disagree with the proposal.

"It's not a bad idea, but I'm bothered by the way it's been approached," Landon said, adding he was "taken off guard" that such problems exist, and said he wanted to know specifically what they are.

Rose was asked outright if the issue had to do with Crystal Bar, and he said no. He said it did trigger an internal review of operations, however.

Minden Supervisor Thomas Quackenbush addressed Barone's concern and said he's happy with the work Landon has provided over the years.

"This is not a witch hunt against Doug," he said. "It was just following the recommendation of the IDA."

The resolution was approved, despite dissenting votes from Barone and Amsterdam town Supervisor Thomas DiMezza.

"I don't like the way it came forward, and I don't like the language in the letter," DiMezza said.

The resolution calls for hiring of Canajoharie attorney Charles Tallent, who handles the defaulted loan collections.